Raiding state school aid fund would be costly mistake

Another opinion

April 24, 2011

As budget negotiations continue in Lansing, there should be one clear mandate. The school aid fund should be used solely for funding K-12 public education. There should be no raid of the fund to help the general fund, which is what Gov. Rick Snyder has proposed.

Snyder says he wants to reinvent Michigan by transforming the state into a place where young people stay, rather than flee. His concern is legitimate. His strategic adviser, Bill Rustem, told a Livingston County audience recently that Michigan is one of the worst states in the union when it comes to attracting young workers.

While Snyder deserves credit for recognizing a problem, his solution is disingenuous. How attractive will a state be if it guts its public education system?

Snyder has the legal right to do this, as long as he can get the legislative vote. The school aid fund can be used for spending on higher education, such as state universities and community colleges. Snyder proposes to help out the general fund by sliding some of these higher ed spending obligations over to the school aid fund.

But the move comes at a great expense to already beleaguered public school budget. Public schools are already expecting a hit of $170 per student. Snyder's proposal takes away another $300. Add to that the growing burden of funding the legislatively designed teacher retirement system, and school districts face a spending challenge that takes $700 per student from the district's bottom line. That's about 10 percent of most Livingston County school budgets.

So what? Haven't many businesses and households had to endure similar or greater cuts? Fair point. But schools have already been cutting costs. And the goal should not be to make sure that schools suffer as greatly as all the rest of us. Public education is a necessary foundation for a strong democracy. We should invest in it, or at least fund it adequately.

Snyder argues that schools can handle much of the revenue decline if they merely make reasonable changes to their compensation packages. In particular, he wants school employees - particularly teachers - to pay for at least 20 percent of their health insurance premiums.

Fair enough. Schools have failed to rein in these costs. But some business managers at schools have done the math. Even if they achieved such concessions, the savings don't match the funding cuts. Also, such savings would take time, particularly for districts that already have long-term teacher contracts in place.

Finally, even if Snyder's move is successful, all that means is that schools have cut costs without adding anything to the classroom. Why not keep the school aid fund intact and use carrot-and-stick incentives to reward districts that can demonstrate compensation reform?

Pulling money from the school aid fund is a rotten trick. The fund now has a $500 million "surplus," which was created when revenue exceeded projections and was saved rather than distributed to schools. Schools took a hit in funding but at least had the assurance that the school fund would be healthy for the next year. Now that's being yanked from them.

It's not that higher ed is getting favored treatment. Even with Snyder's proposed grab from the school aid fund, higher ed is facing a proposed budget cut of 15 percent.

Such dire steps are necessary in a state facing a $1.6 billion deficit. But the situation is worsened by Snyder's proposal to cut business taxes by $1.8 billion.

It makes no sense to cut business taxes on the back of public education. That won't attract young people to our state. It will put our own young people at an unacceptable disadvantage.